The National Association of Home Builders (NAHB) today published an analysis of the U.S. Bureau of Labor Statistics' Producer Price Index Summary, which showed that softwood lumber prices fell 23% in June.
The analysis noted that residential construction materials prices increased 1.5% last month, despite lumber's dip.
According to NAHB, prices have surged 41.7% since January 2020. Building materials (i.e., goods inputs to residential construction, less energy) prices have increased 4.8%, year-to-date, and are 12.2% higher than they were in June 2021. The price index of services inputs to residential construction was driven 2.1% lower in June after a 2.0% decline in May (revised) by decreases in the building materials retail and wholesale trade indices. The services PPI is 0.1% lower than it was 12 months prior and 37.6% higher than its pre-pandemic level.
U.S. Bureau of Labor Statistics
The PPI for softwood lumber (seasonally adjusted) fell sharply (-22.6%) in June, its second such decline in three months. Prices have fallen 35% since March 2022, although the extent to which the decrease has reached home builders and remodelers is unclear, NAHB said.
Since early 2020, softwood lumber prices have been extraordinarily volatile. The average monthly change in the PPI for softwood lumber has been 2.6% since January 2020, nearly nine times the average change (+0.3%) from 1947 to 2020. The volatility of softwood lumber prices has exhibited the same pattern relative to the “all commodities” PPI. While lumber prices were 19.7% more volatile over the 1947-2020 period, they have been 100.1% more volatile than the broader index since January 2020.
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